In a significant move for Pakistan’s e-commerce sector, the government has officially scrapped the 5% tax on foreign digital platforms — a welcome development for online consumers and the growing digital retail market.
The Federal Board of Revenue (FBR) confirmed the decision, stating that platforms such as Temu, SHEIN, and AliExpress will no longer be subject to the Digital Presence Proceeds Tax Act, 2025. The removal of this tax is expected to lower prices for consumers.
According to the FBR notification, the exemption applies to goods and services ordered online and delivered from outside Pakistan. The change took effect on July 1, 2025, and supports Pakistan’s broader strategy to enhance global trade partnerships — especially with the United States — while expanding its digital economy.
Industry analysts say this is a timely relief for Pakistan’s e-commerce sector, which has experienced fast growth but recently faced challenges due to new budget-related taxes.
Although an 18% sales tax remains in place, eliminating the extra 5% levy will reduce costs for buyers and likely increase online purchases. E-retailers and logistics firms see the move as a clear sign of government support for digital commerce.
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